In a recent ruling, the Supreme Court reaffirmed the settled principles governing public procurement, quashing a Calcutta High Court division bench judgment that had permitted post-bid rectification of a financial quote in an e-tender.
The court held that permitting such modifications after the opening of bids undermines the sanctity, transparency and finality of the tender process, and cannot be justified on grounds of an “inadvertent error”.
The matter pertained to a public e-tender floated by the West Bengal Public Works (Roads) Directorate for the collection of road user fees at a toll plaza. Mandeepa Enterprises, one of the bidders, quoted INR972,999 (USD10,962) in its financial bid for a contract period of 1,095 days. This was interpreted by the tendering authority as the total bid value. The bid of Prakash Asphaltings stood at INR911.9 million, and was declared the H1 bidder.
Mandeepa Enterprises, however, claimed that its figure was a per-day rate, and that it had inadvertently failed to multiply it by 1,095. On that basis, it contended that its bid was in fact more than INR1.06 billion and thus higher than that of Prakash Asphaltings. It sought to justify this by relying on clause 5b(v) of the tender terms, which allowed for clarifications to be sought.
The tendering authority rejected this contention, citing clause 4(g), which specifically prohibited any modification of the bill of quantities (BOQ) after submission.
Mandeepa challenged this decision by filing a writ petition before a single judge of the Calcutta High Court. The single judge dismissed the petition, upholding the finality of the submitted bid.
Mandeepa then filed an intra-court appeal before the division bench. The division bench held that the case was not one of modification or amendment of the bid, but a case where the bidder sought to explain the rate quoted in the BOQ form.
Based on that finding, the division bench allowed the appeal, permitted Mandeepa’s explanation to be considered, and directed the tendering authority to re-evaluate the financial bids accordingly.
Aggrieved, Prakash Asphaltings approached the Supreme Court. The Supreme Court held that clause 5B(v), which permits clarifications in respect of bids, does not override clause 4(g), which mandates that no change whatsoever be made to the BOQ template after submission.
Mandeepa’s contention that the quoted amount was on a per-day basis ran contrary to the plain language of the BOQ, which required a total amount for 1,095 days to be quoted in figures and in words.
The court was critical of Mandeepa’s “very casual approach” and held that the bidder “cannot be permitted to blow hot and cold”. The court also rejected the high court’s characterisation that Mandeepa was not amending its bid, and held that the division bench fell into error in accepting the explanation of Mandeepa Enterprises as a mere clarification.
The decision reinforces the settled principle that tender conditions are sacrosanct and cannot be relaxed or overridden by post-bid clarifications, especially when they pertain to financial offers. The Supreme Court’s ruling in Prakash Asphaltings affirms that transparency and fairness in the bidding process are paramount and cannot be compromised by subsequent justifications, however inadvertent or well-intentioned the error may be.
The dispute digest is compiled by Numen Law Offices, a multidisciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at support@numenlaw.com. Readers should not act on the basis of this information without seeking professional legal advice.
